Don't get too relaxed about your pension

George Osborne might leave pensions alone for now, says Merryn Somerset Webb. But don't count on it staying that way.

It's been a good week for readers trying to save. Last month we suggested that you panic about your pension provisions. With George Osborne having made it pretty clear that he wasn't done with his tax relief tinkering, we figured there was a very strong chance that higher earners would see their reliefs slashed. So we told you to pile cash in while you still could. I suspect a good many of you have done just that (I certainly have). That's good saving is almost never bad. But the good news is that the urgency seems to be gone.

Osborne has let it be known that he doesn't intend to make more major changes to the pension system in next week's Budget: you no longer need to feel panicked into super-scrimping in order to get a few more tax-free pennies into your pension wrapper before the 15th. That said, we don't think you should relax. The UK government is still broke and the tax relief on pension contributions is still very expensive. This isn't going away: at some point after the referendum, the 25% tax-free lump sum will go and so will higher and top-rate tax relief. This is not an "if", but a "when".

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.